Explain the difference between the functions of long-term operational assets and investments.

Question

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Answer 1

Question

Chapter 8, Problem 1Q

To determine

Explain the difference between the functions of long-term operational assets and investments.

Expert Solution & Answer

Explanation of Solution

Long-term operational assets:

Long-term operational assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Investment:

The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Difference between functions of Long-term operational assets and Investments:

Long-term operational assets are the assets which are used by the company in order to generate revenue in the ordinary course of business. Whereas, investments are held by the company in order to earn interest and dividends from them and for appreciation in the price of the investments.

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The industrial enterprise "HUANG S.A." purchased a sorting and packaging machine from a foreign company on 1/4/2017 at a cost of €500,000. The useful life of the machine was estimated by the Management at ten (10) years, while the residual value was estimated at zero. For the transportation of the machine from abroad to the company's factory, the amount of €20,000 was paid on 15/4/2017. As the insurance coverage of the machine during transportation was the responsibility of the selling company, HUANG S.A. proceeded to insure the machine from 16/4/2017 to 15/4/2018, paying the amount of €1,200. The delivery took place on 15/4/2017. As adequate ventilation of the multifunction device is essential for its proper operation, the company fitted an air duct on the multifunction device. The cost of the air duct amounted to €2,000 and was paid on 20/4/2017. On 25/4/2017, an external electrician was paid €5,000 for the electrical connection of the device. The company also paid €5,000 to an…

Answer 2

Question

Chapter 8, Problem 1Q

To determine

Explain the difference between the functions of long-term operational assets and investments.

Expert Solution & Answer

Explanation of Solution

Long-term operational assets:

Long-term operational assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Investment:

The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Difference between functions of Long-term operational assets and Investments:

Long-term operational assets are the assets which are used by the company in order to generate revenue in the ordinary course of business. Whereas, investments are held by the company in order to earn interest and dividends from them and for appreciation in the price of the investments.

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Answer 3

Question

Chapter 8, Problem 1Q

To determine

Explain the difference between the functions of long-term operational assets and investments.

Expert Solution & Answer

Explanation of Solution

Long-term operational assets:

Long-term operational assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Investment:

The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Difference between functions of Long-term operational assets and Investments:

Long-term operational assets are the assets which are used by the company in order to generate revenue in the ordinary course of business. Whereas, investments are held by the company in order to earn interest and dividends from them and for appreciation in the price of the investments.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 8, Problem 1Q

To determine

Explain the difference between the functions of long-term operational assets and investments.

Expert Solution & Answer

Explanation of Solution

Long-term operational assets:

Long-term operational assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Investment:

The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Difference between functions of Long-term operational assets and Investments:

Long-term operational assets are the assets which are used by the company in order to generate revenue in the ordinary course of business. Whereas, investments are held by the company in order to earn interest and dividends from them and for appreciation in the price of the investments.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 8, Problem 1Q

To determine

Explain the difference between the functions of long-term operational assets and investments.

Expert Solution & Answer

Explanation of Solution

Long-term operational assets:

Long-term operational assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Investment:

The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Difference between functions of Long-term operational assets and Investments:

Long-term operational assets are the assets which are used by the company in order to generate revenue in the ordinary course of business. Whereas, investments are held by the company in order to earn interest and dividends from them and for appreciation in the price of the investments.

Answer 6

Chapter 8, Problem 1Q

To determine

Explain the difference between the functions of long-term operational assets and investments.

Expert Solution & Answer

Explanation of Solution

Long-term operational assets:

Long-term operational assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Investment:

The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Difference between functions of Long-term operational assets and Investments:

Long-term operational assets are the assets which are used by the company in order to generate revenue in the ordinary course of business. Whereas, investments are held by the company in order to earn interest and dividends from them and for appreciation in the price of the investments.

Answer 7

Chapter 8, Problem 1Q

To determine

Explain the difference between the functions of long-term operational assets and investments.

Answer 8

Expert Solution & Answer

Explanation of Solution

Long-term operational assets:

Long-term operational assets refer to the fixed assets, having a useful life of more than a year that is acquired by a company to be used in its business activities, for generating revenue.

Investment:

The act of allocating money to buy a monetary asset, in order to generate wealth in the future is referred to as investment.

Difference between functions of Long-term operational assets and Investments:

Long-term operational assets are the assets which are used by the company in order to generate revenue in the ordinary course of business. Whereas, investments are held by the company in order to earn interest and dividends from them and for appreciation in the price of the investments.